ABSTRACT

We examine recent confrontational activism campaigns by hedge funds and other private investors. The main parallels between
the groups are a significantly positive market reaction for the target firm around the initial Schedule 13D filing date, significantly
positive returns over the subsequent year, and the activist's high success rate in achieving its original objective. Further,
both activists frequently gain board representation through real or threatened proxy solicitations. Two major differences
are that hedge funds target more profitable firms than other activists, and hedge funds address cash flow agency costs whereas
other private investors change the target's investment strategies.